If government shuts down, economy would feel it

9:54 PM,
Sep. 25, 2013

A federal government shutdown would have an effect on the economy.

Written by

Tim Mullaney
Gannett

If the federal government shuts down next week, the economic impact would be small at first but grow quickly.

A partial shutdown would cut the economy's annual growth rate in the fourth quarter by 0.2 percentage points, to 2.5 percent, even if it ended in three or four days, Moody's Analytics chief economist Mark Zandi told the Senate Budget Committee Tuesday.

A three-to-four week impasse could reduce growth by 1.4 percentage points - effectively cutting the economy's expected growth rate by half or more. About half of civilian government workers wouldn't be able to go to work, and their lost ...